AbbVie Is Good Medicine

This Abbott spinoff is up 33% since the start of the year, but still looks undervalued.

When the medical-products giant Abbott Laboratories split into two separate companies earlier this year, its old pharmaceutical business, rechristened AbbVie, was widely regarded as the less desirable of the two stocks.

AbbVie (ticker: ABBV) was poised for slower earnings growth, and it sported a higher dividend yield – now 3.6% – than the new Abbott Labs (ABT). Analysts were concerned about patent expirations, which could wipe out roughly $1 billion in cholesterol drug sales next year. And a bigger hit comes in 2016,...